The Colombian Coffee: Assessing its Suitability for Export to the United States
The Colombian coffee product's suitability for export to the United States of America is assessed in the business strategy. In the business plan, the tactics and competitive positioning of Columbian coffee in the American market are analyzed, as well as the internal and external elements that will contribute to the product's success. In addition, the business plan outlines the characteristics of the American market—its political climate, cultural diversity, and market structure—that make it a prime candidate for the product's target market. The paper uses SWOT analysis and other strategies to formulate the export position of the Columbian coffee.
Purpose
The purpose of this Export Business Plan is to show the competitive advantage of the product in the foreign market. The Business plan shows the nature of the product and the foreign country that it is being exported. In addition, the plan shows the political and economic environment of the foreign country to access whether the product will meet demand and the nature of competition in the market. Furthermore, the business plan reviews the opportunities and threats in the market and the various marketing strategy the company should take to create product awareness and improve export sales. Export Business Plan is a systematic outline that shows the competitive abilities of the product in the international market and the operations actions and customer's attitude towards the product. The plan helps in formulating strategies and gaining knowledge of the foreign market before commencing the exportation process.
Introduction
Coffee production in Columbia is the third largest in the world behind Brazil and Vietnam in terms of exports. Annually, Columbia produces 11 million bags and is its main exporter to the United States. Columbian coffee is highly regarded due to its mild and well-balanced coffee beans. The United States is one of the main consumers of coffee in the world and therefore provides a ready market for Columbian coffee. I used the United States as the foreign country to export the coffee product since they are the second largest consumer of coffee behind Brazil. In addition, the Columbian coffee export in the USA is not subject to any tariffs, which makes it a suitable exporter of the product.
Situation Analysis
In Columbia, more than 500,000 coffee owners fulfill their family tradition of growing premium quality coffee, which has been passed through generations. Columbia grows coffee across 2.2 million acres in the axis region that has a suitable climate for coffee production. The Columbians value coffee production since it is the primary source of rural unemployment and part of the national identity. In the last five years, more than 37% of Columbian coffee exports were shipped to the United States (Bosselmann et al., 2009). Using the SWOT analysis to evaluate the Columbian coffee to evaluate how the export of the product will be demanded in the United States. First, Columbia has good conditions that favor the growth of coffee beans, which are mild flavor and demanded globally. Columbia has volcanic soil in the axis region of Cali and Medellin, which make the Columbian coffee bean taste delicious. Another strength of the Columbian coffee is that the product is a high-quality Arabica bean. The main weakness of Columbia coffee is the increase in price in the international market and competition from Brazil and Vietnam. The Columbian coffee has opportunities to expand its exports in the United States due to the high demand for coffee by American citizens. The main threat is competition and increased the cost of coffee production in Columbia.
Country History
The United States is the second coffee consumer in the whole world behind Brazil. The United States is a federal republic that comprises 50 states, which are self-governing and semi-sovereign states. The United States and Columbia have a history of trade partnership and have signed a free trade agreement that allows Columbia to export its coffee to the country with no taxes. On the other hand, the United States trades with Colombia and is its leading importer of crude oil, petroleum products, and coffee while Columbia imports technological products and automobiles. The United States has the biggest economy in the world ahead of China, and there provides a suitable market for Columbian coffee (Pendergrast, 2010). The American culture of eating in fast food restaurants and coffee shops has increased the demand for the delicious Columbian coffee. In addition, the American population is approximately 330 million and more than 50% of the population prefers coffee to tea, which increases the export sales of the product.
Cultural Overview
In the United States, the evolution of coffee has led it to become part of the consumer's daily life. America is known to consume coffee more than any other nation, and the culture has accepted the Columbian coffee as a high-quality product with delicious taste. More than 96% of Americans recognize Columbian coffee as a high-quality product, and this will promote the sales of the product in the market. What the education level in the United States is high with more people holding Ph.D., Masters, and college degrees. Coffee consumption is proportional to the education spectrum and race. There are many high-end coffee shops in the country such as Starbucks and McDonald's that sell fresh roasted Columbian coffee with a unique smell and delicious taste (Barjolle et al., 2017). In addition, educated people in offices and workplaces have coffee machines that produce quality Columbian coffee and most people in professional careers make up more than 46% of American coffee consumers.Besides, the Columbian coffee will be received well in the United States since it has become part of the consumer's daily life and is consumed in the morning, break time and afternoon. The Columbian coffee is labeled in English upon arriving in the United States since most Americans speak English with some percentages speaking Spanish. The American practices, culture, and norms support the export of Columbian coffee since there are many coffee shops in the country that serve as meeting joints and places to relax (Tucker, 2017). Moreover, American people can either take coffee in high-end coffee shops or make their own from coffee machines at home or office.
Political Environment
The American structure of governance is composed of three branches of government: legislative, executive, and judicial. The political environment in the country is stable and facilitates the exportation of goods and services from other nations. The exportation of coffee from Columbia to the United States is duty-free and falls under free trade. The Food and Drug Administration inspects the coffee exported to the United States to ensure they are safe and healthy for public use. The export should be properly labeled and packed according to FDA requirements. There are no taxes or quotas on the Columbian coffee to the states, and that makes the economic environment suitable for trade (Tucker, 2017). The political environment is conducive for trade agreements, and the international agreement between Columbia and the United States allows duty-free exportation of the product.
Export Marketing Plan
The ideal target market for coffee exports is a nation that has many drip coffee drinkers. Research shows that more than 77% of adults in the United States drink coffee on a daily basis. The coffee drinkers range from students to office workers who prefer taking coffee takeaways from coffee shops and roadside vendors. Another ideal target market for the Columbian coffee in the United States is the presence of high specialty coffee drinkers. High-end coffee shops such as Starbucks sell espressos, cappuccinos, and lattes to a target market group that wants extra ingredients in their coffee and are willing to pay a premium to get what they want (Tucker, 2017). The high demand for coffee and coffee beans in the United States makes it an ideal market for the Columbian coffee. The long-term goal is to ensure the Columbian coffee is the number one choice in the United States for home, office, and high-end coffee shops by ensuring high-quality coffee beans and proper production.
Economic Development
The United States is one of the most developed nations in the world, and this will positively influence the exportation of the product. Like other developed nations, the United States has a large capital base and an active economy that can accommodate the product at a reasonable price. The Colombian coffee has another added advantage in the American market since its reputation as a high premium coffee is widespread (Rueda, 2013). Most Americans at both home, offices, and high-end coffee shops prefer the Colombian Arabica because of its delicious taste and caffeine content.
Summary
The export business plan is for Columbian coffee to be exported to the United States of America. The choice of the foreign country is because America is one of the leading coffee consumers in the world and has a developed economy to import the product at a good price. The Columbian coffee faces little competition from Brazil and Vietnam due to their brand awareness and recognition in the American market. The main strength of the product is high quality and 100% pure Columbian Arabica. The main feature of the foreign market is that it has a culture that loves drinking coffee and values quality, which is the main competitive feature of the product.
References
Barjolle, D., Quiñones-Ruiz, X. F., Bagal, M., & Comoé, H. (2017). The Role of the State for Geographical Indications of Coffee: Case Studies from Colombia and Kenya. World Development.
Bosselmann, A. S., Dons, K., Oberthur, T., Olsen, C. S., Ræbild, A., & Usma, H. (2009). The influence of shade trees on coffee quality in small holder coffee agroforestry systems in Southern Colombia. Agriculture, ecosystems & environment, 129(1), 253-260.
Pendergrast, M. (2010). Uncommon grounds: The history of coffee and how it transformed our world. Basic Books.
Rueda, X., & Lambin, E. F. (2013). Linking globalization to local land uses: How eco- consumers and gourmands are changing the Colombian coffee landscapes. World Development, 41, 286-301.
Tucker, C. M. (2017). Coffee culture: local experiences, global connections. Taylor & Francis.
